Friday 27 April 2018

Frankel bursts doubters' bubble in thrilling Dewhurst

Cecil inmate lives up to pre-race hype as stock rises further, writes Ian McClean

The economic bubble is as old as economics itself.

Not many of us remember the Tulip bubble back in the Netherlands (although referenced in the currently released Wall Street 2 by Michael Douglas aka Gordon Gecko) but back in the 17th century, such was the frenzy over tulips that single bulbs were exchanged for livestock, property, even land, and traded in the currency of the day (florins) for as much as six times annual salary.

Almost four centuries on, the concept of exchanging a tulip bulb for a house in Amsterdam downtown seems as preposterous as it does risible. But then economic bubbles, by their nature, are rarely based on reason. There was nothing reasonable about the Enron share price before it collapsed; or any of the dotcom darlings who disappeared without trace at the start of the noughties; or any of the houses we so overpaid for in Ireland, but then hindsight is the sobering union of wisdom and clarity. Bubbles are an emotive inflation experienced going forward, but best understood looking backwards.

The bubble is a market phenomenon dictated when hype and sentiment triumph over hard fact analysis. It matters not whether the vehicle is an item of derivative, commodity, real estate, a tulip or in this instance a racehorse.

Because last week witnessed the greatest example of racehorse market bubble since the Japanese Deep Impact started 1/10 for the Arc -- in the shape of the Dubai Dewhurst. For weeks, the race that traditionally decides the season's leading two-year-old has been building into a vintage renewal.

The headlines during the lead-up tangoed between hailing it as "The best Dewhurst of the last century" and proclaiming it (the Racing Post lead of yesterday) "The greatest two-year old race ever". However, in the race billed the latest "clash of the titans" one horse alone claimed the attention. Frankel -- named after the legendary US trainer -- was the only horse the market wanted.

His unbeaten form line of three-from-three was mirrored by chief rival Dream Ahead. No surprise that they each faced-off in the betting market but it was the extent of their price difference that baffled all logic. Both have been supremely impressive in victory on all occasions. But whereas Dream Ahead had won two Group Ones,

Frankel hadn't even run in one. Indeed the horse Frankel beat in his Newmarket maiden, is still a maiden. And since then in his next two victories he had beaten only six horses. While it is customary for a horse to step up from six furlongs (the distance of Dream Ahead's two Group One wins) to win the Dewhurst, it is very rare for one to step back from a mile (the distance of Frankel's Royal Lodge). Indeed, the last horse to complete the Royal Lodge/Dewhurst double was as far back as 1953 with Infatuation.

When betting opened some bookmakers went as short as 1/2 about Frankel and as long as 7/2 Dream Ahead in spite of the fact that on Timeform ratings Dream Ahead was 1lb clear. Betfair's spokesman went so far as to call the market "plain wrong".

The reason Frankel traded so short was not owing to what he had accomplished on the racecourse, but what he was achieving off it. In short, the market was being fuelled by hype. The hype started after Ascot when legendary trainer Henry Cecil described the colt as the best two year old he has had since Wollow which won the Dewhurst 35 years ago. Reports were rife of the Group One pigeons he was lapping on the gallops in the morning. His reputation became so inflated that the industry paper described Frankel as "possibly the most talked-up juvenile of all time".

And the speculation of what he might achieve superceded the substance of what Dream Ahead had already achieved.

On the morning of the race the market began to wobble. Sellers outnumbered buyers. Market sentiment in Frankel finally began to wane. Many sensed a bubble. The four millimetres of rainfall favoured Dream Ahead. The 1/2 had drifted to 8/11 by mid-morning and further to 5/6 close to race-time. But sentiment rehardened near the off and hammered the price back down to 4/6.

Cecil has been around long enough to know his geese from swans. In mid-week when asked about Frankel he astutely said "Bubbles burst -- I hope this one won't". Frankel's scintillating win in the Dewhurst justified all the hype and sees him odds-on in most books for next year's Guineas. So was it really a market bubble? Henry can mull it over as he tends to his tulips in the calm of Warren Place.

Sunday Independent

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